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Sonata Software Q2 Review- Continued Investments Showed Tailwind In Deal Wins Especially In Annuity: KRChoksey

Growth was mainly driven on the back of top 20 clients and has successfully added 12 new clients in Q2.

<div class="paragraphs"><p>A programmer working on a laptop. (Photo: Danial Igdery/ Unsplash)</p></div>
A programmer working on a laptop. (Photo: Danial Igdery/ Unsplash)

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KRChoksey Research Report

Sonata Software Ltd.'s Q2 FY23 performance was marginally higher than our estimate. Rupee revenue grew by ~55% YoY to Rs 14,960 million (our estimate: Rs 12,122 million).

Reported operating margin stood at to 9.4% and reported net profit grew by 4.6% QoQ to Rs 1,127 million (our estimate: Rs 1,021 million) with margin of 7.5%.

Domestic product services posted a strong quarter (up 38% YoY), supported by growth in cloud license and higher annuity revenue. In Q2 FY23, International IT services Ebitda margin stood at 27.4% and DPS Ebitda margin stood at 3.75% and consolidated Ebitda margin stood at 10.5%.

Sonata Software has declared an interim dividend of Rs 7. Growth was mainly driven on the back of top 20 clients and has successfully added 12 new clients in Q2 and has added 19 new USD million clients this quarter.

Management has indicated that pipeline continues to be healthy and strong through multiple new digital wins from existing and new customers.

Click on the attachment to read the full report:

KRChoksey Sonata Software Q2FY23 Result Update.pdf

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